Mobile Ad Spend Outpacing Estimates

Jul 25, 2016 by Mark Maier

It was supposed to surpass desktop digital spending in two years, now there is a new estimate out from The Center For Media Research that says Mobile will do it in 2017...

"It has long been predicted that mobile ad revenue would overshadow that of desktop. According to ZenithOptimedia’s new Advertising Expenditure Forecast, mobile’s dominance has arrived early; the agency sees brands spending $99.3 billion on mobile advertising next year, versus $97.4 billion on desktop ad spend. The study expands on recent figures that highlight just how massive mobile advertising has become.

Over the last year, mobile ad revenue has grown 95%, at the expense of nearly every other medium, from desktop to radio. The report shows an additional 46% this year, followed by 29% the two subsequent years, resulting in 58% of the total ad market by 2018.

Share of Global Adspend (% of Total)
Medium	2015	2018
Television	36.9%	33.7%
Desktop internet	19.5	16.0
Mobile internet	10.4	22.4
Newspapers	12.6	9.6
Magazines	6.5	5.0
Radio	6.7	6.1
Outdoor	6.8	6.6
Cinema	0.6	0.7
Source: ZenithOptimedia/ClickZ, June 2016

The shift toward mobile has affected different ad formats. Banner ads don’t work as well on the smaller mobile screens and as a result, the report says they are expected to shrink by 3.1% this year, despite increasing by 8.6% in 2015.

Online video, says the report, is getting better and better from a user experience standpoint and as a result, video ads are projected to grow by 20.1% each year until 2018. And, paid social growing 23.6% over that period.

The report shows that paid search trumps all the mobile formats when it comes to ROI, according to the majority of respondents. Paid search comes with less uncertainty than either display or social advertising; 30% don’t know how to rate their ROI, compared with a respective 37 and 35%. Of those who do understand, only 12% say that mobile paid search results in poor ROI. Nearly one-third think it’s at least good; 15% said the same about display.

On another front, ad blocking is primarily seen as a desktop issue, but recent research shows that its mobile adoption is increasing at an alarming rate. Around the world, 22% of smartphone users, 419 million people, are blocking ads on the mobile web.

The frequently-cited reason for using ad blockers include irrelevant ads and disruptive ads, notes the report. On mobile, they greatly improve loading time, according to Catchpoint Systems, analyzing the loading times of 20 mobile sites from five publishers and 15 brands, with and without ad blockers turned on. On publishers’ websites, loading speed increased 27 to 49% with ad blockers.

CNN had the slowest site of the study, with a page taking an average of 14.8 seconds to load without an ad blocker; with, the time dropped down to 7.6%. Brand pages generally loaded faster than those of publishers, even without an ad blocker, Amazon’s site loaded in 1.68 seconds."

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